In the coming days, Congress will be debating whether or not to raise the country’s debt limit.  We all know that they will raise the limit to some unfathomable level.  Time and time again I plead with the American public to contact their representatives in an attempt to stop this kind of nonsense.

Obviously, the American people don’t care or don’t understand the true ramifications of these actions by our government leaders.  The debt that we have right now is more than we can pay back within the next 25 years.  So raising the limit will only encourage the borrowing of more money that we cannot pay back for generations.  This is beyond being stupid.  As it is, if the Chinese decided they wanted us to pay back the money we owe them right now, we couldn’t do it.  Consequently, they would literally own the entire country.  Gone would be all of our freedoms.  Gone would be any influence over government.  Gone would be the best health care in the world.  Gone would be our ability to obtain the truth about anything.  Gone would be our right to express our displeasure with the current state of affairs.  Gone would be our right to worship the true God or even a god from our imagination.

What this country needs is a balanced budget amendment.  It needs to be illegal for our government to borrow money from another country except in the extreme situations of war and natural disaster.  We also need an amendment to cap the income tax rate.  The government should not have the right to just arbitrarily raise the rates.  It is not their money to take.  We also need an amendment requiring Congress to account for every penny spent.  That way, when 100 – 300 million dollars is allocated to the state of Louisiana, they will have to spell out exactly what that money will be spent on.  The only exception should be for military spending and for intelligence spending.  Everything else needs to be held accountable to the public.  The military and intelligence needs to be held accountable to a bi-partisan Congressional panel not the general public.

If we put in these amendments, then Congress cannot legally spend money they do not have to spend.  Plus, they cannot just raise taxes to obtain the money they want for their pet projects.  If the pet project is important enough, then cut something else to produce the revenue necessary to pay for that pet project. 

People, if we don’t beat this kind of common sense approach into our Congressional representatives, they will continue to sell this country to the rest of the world.  We need representatives that will do what is best for this country not for themselves.  Call them, write them, email them, do whatever it takes to make it clear to them that enough is enough.  Make it clear to them that they need to represent us or they are history.

I suppose this blog dedicated to the people that exhibit empathy when they see someone in need, hurt, or sick.  I was a late baby. My mom had me when she was about 37.  So as she was rather ‘old school’ in her upbringing of me.  She instilled values that many people have lost clearly today.  Common courtesy things such as: greeting a person when you see them, holding the door for the person that is behind or in front of you, helping a person in need, or my personal favorite… showing empathy and kindness to a person’s plight.   What tends to happen is the kind person tends to be taken advantage of.  Here are some scenarios and I’ll leave you to determine whether or not they are a ‘person taking advantage” or a “person genuinely in need.”

1. A friend goes to Person A and expresses how they are desperately in need of cash.  Friend tells Person A that her husband has been going through something and they need the money to pay down some things…  Friend says “I need $5,000.”  So, Person A successful at the time, loans Friend the $5,000 dollars on good faith that this friend will pay the money back in a fairly reasonable amount of time.  The friend agrees to pay $100 (a week or month) until the $5,000 is decreased to $0.  Friend pays the first $100 nearly a week later.  Friend doesn’t pay for atleast a year… Friend pays a bit more off the $5,000 loan. Three years later… there’s still a balance on the $5,000 loan.  Was this a ‘taking advantage’ or ‘genuinely in need’?

2. Person A is sitting on the train (public transportation) and a woman taps her on the shoulder. She holds a note to Person A asking if she has any money.  Person A pulls a dollar out and hands it to her.  The woman hits up everyone on the train same routine.  Person A observes that everyday at the same time this same woman follows the same procedure.  One day, Person A is walking from a restaurant and she sees the woman ‘Tapper’ at a stop light.  The ‘Tapper’ has on a flowing silk pink dress and some sling back shoes.  ’Taking advantage’ or ‘genuinely in need’?

3. Person A is walking through the park and sees a homeless lady that she sees nearly every day.  This particular day the homeless woman was sitting on the bench feeding a squirrel bits of her own food. ‘Taking advantage’ or ‘genuinely in need’

4. A friend selectively sends a ‘letter’ to certain people requesting their help.  She claims that her livelihood and the livelihood of her son’s are essentially in jeopardy because her computer… has died and that is her main source of income.  When Person A gets the ‘letter’ she goes to Person B and asked “Hey girl… did you get this letter from Friend A?”  Person B says “No I didn’t get that…” So Person A sends Person B the letter and wonders why she, Person A, received the letter, and not Person B. Person A starts thinking back to a conversation she’d had recently with Friend A.  Apparently, Friend A had been sick but refused to get surgery (whether it was because of money or her beliefs I’m not certain).  At no time did her sickness result in a ‘written cry for help.’  However her computer dies and she’s asking for donations… ‘Taking advantage’ or ‘geniunely in need’?

5. Friend A decides to give his apartment to the mother of his child and he will move in with Person A.  Person A agrees to let Friend A stay with her until he gets on his feet or whatever.  Friend A proceeds to live nearly rent free in Person A’s house not even offering to give money.  Person A accepts it until she loses her job.  Friend A continues to not pay for anything… except the cable bill because that’s what he watched in the house.  Person A would go grocery shopping and Friend A would proceed to have his daughter and the daughter’s sister over to the house and they would consume what was purchased.  Friend A tells Person A that he doesn’t have any money and that he’s going to file bankruptcy.  Person A takes Friend A’s word until Person A finds Friend A’s bank statement and finds that Friend A has over $7,000 in his savings account. ‘Taking advantage’ or ‘genuinely in need’?

Granted most of the situations I’ve mentioned above are in fact ‘taking advantage’ scenarios and before you wonder… yes they’re all true.  What exactly is the price of kindness?  Can we reserve kindness until we determine whether or not we are at risk of being swindled?  If we do reserve our kindness it would appear that we are coming off as unkind or possibly even rude, should we care?  If we appear unkind does that halt the apparent necessitation to victimize an individual?

Designers must be jumping for joy to experience the craze purses have produced these days. Women will go to great lengths to carry a famous Designer Handbag. It’s so very important businesses have popped up in every shape and form catering to this market niche.

Thankful for the Internets global exposure entrepreneurs reach people in all parts of the world looking for a new designer purse. Handbags in every price range are available to rent or purchase online. To those of you who aren’t in the handbag circles paying $5000 for a pre owned Hermes handbag is no shock to those of us in the know!

There are authentic designer purses and counterfeit faux with hefty price tags resembling the real bags. So be careful not to fall prey to a fake unless of course, that’s what you are in the market to purchase. Some of the counterfeits are so closely matched to the authentic handbags it takes an expert to know the difference. Prior to making a high priced handbag purchase visit a Discount Designer Handbag Blog for guidance. The one many people consult prior to making a purchase is located at ValueBags.com. You can email the Blog owner and receive a prompt reply. Be safe, not sorry.

So whether you are in the market for a quality designer valuebag priced under $100 or you are planning to buy your next $5000 Hermes handbag the internet is available to conduct thorough research prior to the purchase.

Wait! There are many purchase options. Websites offer consumers the opportunity to purchase a new bag put your bag on a layaway plan or borrow the bag instead of owning it. Personally the thought of borrowing a purse rubs me the wrong way. My head immediately starts asking questions. Who carried it last? What was inside it? Where had it been? You know all those weird thoughts about sanitation and germs!

Dont laugh. You remember when you were a child and your mom told you not to touch anything when you were in a public restroom. Well think about it. A purse is a very important part of your personal equipment. Hey! I’ve even carried my Maltese in my purse. But he is my mutt so it is OK.

So borrowing a designer handbag regardless of the cost just doesn’t feel comfortable. However owning my own designer purse regardless of the cost is the price I am willing to pay for the tastes I have grown accustomed. There’s nothing wrong with bargain hunting and finding the best bag for the best price. There are several places to shop both online and off. When was the last time you went shopping and didn’t find a sale, bargain or clearance event?

Please don’t take my opinion the wrong way. If you don’t mind carrying a purse after a stranger has used it, thats your decision to make not mine. I like knowing the black Prada backpack I need to use when I travel is carefully stored in its sleeper bag in the closet waiting for my next trip. To allow the sharing my Vintage Gucci JackieO with a person I never met is unlikely. The same is true for my prized Hermes Birkin and Kelly bags. Could you imagine anyone else using your favorite purse? I’m so attached to most of my high end designer handbags they’ve become an integral part of my personal insignia.

So, heres my final word of advice to all the designer handbag addicts. Save your money and invest in the bag of your dreams. If next year its no longer something you want to keep around, sell it, and buy another! Theres websites where you can recycle pre-owned authentic designer handbags.

Shop around. Buy authentic designer products, and enjoy them for a long time. Care for your bag babies and properly store them when they are not being used. Its very rare for a hot style to fall short in longevity. Look at the famous Fendi Baguette. Its still a hot little number and has been on the arms of the rich and not so famous for about ten years.

Designer handbags are the rage. Yes, its so true. You can buy a pair of jeans at the Gap for $60 and wear them carrying your $5000 Hermes. Now, doesn’t that sound more appealing than renting a purse? Think twice about membership fees adding up to the cost of a designer purse. Save your money and buy yourself that new Prada, Fendi, Gucci or Hermes. You’ll be very glad you did.

Designers must be jumping for joy to experience the craze purses have produced these days. Women will go to great lengths to carry a famous Designer Handbag. It’s so very important businesses have popped up in every shape and form catering to this market niche.

Thankful for the Internets global exposure entrepreneurs reach people in all parts of the world looking for a new designer purse. Handbags in every price range are available to rent or purchase online. To those of you who aren’t in the handbag circles paying $5000 for a pre owned Hermes handbag is no shock to those of us in the know!

There are authentic designer purses and counterfeit faux with hefty price tags resembling the real bags. So be careful not to fall prey to a fake unless of course, that’s what you are in the market to purchase. Some of the counterfeits are so closely matched to the authentic handbags it takes an expert to know the difference. Prior to making a high priced handbag purchase visit a Discount Designer Handbag Blog for guidance. The one many people consult prior to making a purchase is located at ValueBags.com. You can email the Blog owner and receive a prompt reply. Be safe, not sorry.

So whether you are in the market for a quality designer valuebag priced under $100 or you are planning to buy your next $5000 Hermes handbag the internet is available to conduct thorough research prior to the purchase.

Wait! There are many purchase options. Websites offer consumers the opportunity to purchase a new bag put your bag on a layaway plan or borrow the bag instead of owning it. Personally the thought of borrowing a purse rubs me the wrong way. My head immediately starts asking questions. Who carried it last? What was inside it? Where had it been? You know all those weird thoughts about sanitation and germs!

Dont laugh. You remember when you were a child and your mom told you not to touch anything when you were in a public restroom. Well think about it. A purse is a very important part of your personal equipment. Hey! I’ve even carried my Maltese in my purse. But he is my mutt so it is OK.

So borrowing a designer handbag regardless of the cost just doesn’t feel comfortable. However owning my own designer purse regardless of the cost is the price I am willing to pay for the tastes I have grown accustomed. There’s nothing wrong with bargain hunting and finding the best bag for the best price. There are several places to shop both online and off. When was the last time you went shopping and didn’t find a sale, bargain or clearance event?

Please don’t take my opinion the wrong way. If you don’t mind carrying a purse after a stranger has used it, thats your decision to make not mine. I like knowing the black Prada backpack I need to use when I travel is carefully stored in its sleeper bag in the closet waiting for my next trip. To allow the sharing my Vintage Gucci JackieO with a person I never met is unlikely. The same is true for my prized Hermes Birkin and Kelly bags. Could you imagine anyone else using your favorite purse? I’m so attached to most of my high end designer handbags they’ve become an integral part of my personal insignia.

So, heres my final word of advice to all the designer handbag addicts. Save your money and invest in the bag of your dreams. If next year its no longer something you want to keep around, sell it, and buy another! Theres websites where you can recycle pre-owned authentic designer handbags.

Shop around. Buy authentic designer products, and enjoy them for a long time. Care for your bag babies and properly store them when they are not being used. Its very rare for a hot style to fall short in longevity. Look at the famous Fendi Baguette. Its still a hot little number and has been on the arms of the rich and not so famous for about ten years.

Designer handbags are the rage. Yes, its so true. You can buy a pair of jeans at the Gap for $60 and wear them carrying your $5000 Hermes. Now, doesn’t that sound more appealing than renting a purse? Think twice about membership fees adding up to the cost of a designer purse. Save your money and buy yourself that new Prada, Fendi, Gucci or Hermes. You’ll be very glad you did.

Three huge problems with SBA guaranteed loans, they are now guaranteed up to 90%. In a word, the bankers who are lending, very few, even with a 90% guaranty, cannot possibly lose any money and why aren’t they lending more under these guaranties? A rhetorical question, however those that are lending are motivated in two ways, both of which spell real trouble for the borrower.

1. They frequently lend you too much, upping your request, suggesting they could qualify you for more so why not take it, and who can say NO. So the happy new entrepreneur enriched by a loan larger than he needs and cannot pay back, happily goes into business, now more likely to fail because he borrowed too much and will eventually choke on debt service. A recipe for disaster, thank you Mr. Banker for your wisdom and greed. It will not be long before you are enjoying your guaranty and your borrower is worrying about how to save his house.

2. Then there is the other end of the spectrum, the banker who decides he will be conservative and counter differs the borrowers request offering him far less than he asked for, which of course the borrower reluctantly accepts and then defaults because it is not enough… brilliant.

3. The third common sin I see, is the ridiculous business plan that has no chance of success yet because of the 90% guaranty, the banker is willing to fund it, after all he has limited or no risk.

Since there is little likelihood that some bankers will overcome these bad practices, and since in the end it is the borrower who will pay the price with his personal guaranty, it is the borrower who must be aware of these issues and employ the following protective strategies.

a. Borrow only exactly what you really believe you will need, too much will cause too high a debt service and will erode your cash.

b. Walk away from a loan that is too little, underfunding is guaranteed failure as it will prevent you from implementing your strategies and will force you into failure.

c. A poorly constructed business plan that is unlikely to succeed is built in disaster. Have someone with business experience check it out, make you defend your assumptions and projections, make certain there is a chance for success. Of course make certain your cash flow pro-forma is realistic.

Your loan and the success of your business is your responsibility not the bankers. In fact the banker may have a different set of objectives to fulfill. He is renting you money with a 90% guaranty from the SBA. Be careful, his opinion may not be in your best interest. Do not sow the seeds for tomorrow’s workout.

Small businesses will suffer under their latest financial burden: The cost of rising unemployment itself.  States are being forced to increase state taxes on companies to pay for unemployment insurance claims.  Because small businesses create about 60 percent of new jobs, it could hamper the economic recovery as employers are already squeezed by tight credit, rising health care cost, wary consumers and a higher minimum wage.  (read more Omaha World-Herald)

Hello, Happy Sunday!

I’ve just changed the layout of my wordpress page to optimize image viewability and realised that I have a plethora of broken links.  So firstly, apologies if you cannot view any sets of images at the moment, I’m currently in the process of fixing this!

I took the decision to delete my flickr page for a few reasons; mainly because of the safety of my high-res images.  Generally speaking, the internet is not a safe place to house any artwork because it’s so easy to… “borrow”.  Granted that! You hope that people use your work and say it’s by you – helping to increase exposure!

My problem with flickr was that it allowed anyone to access my high-res versions, no questions asked.  I’ve used deviantART since the beginning of my photographic career and respect that they give you the options of which sizes anyone can have access to – plus they work directly with the Creative Commons charity!

In the future, my high-res images will still be housed on my deviantART account and sets of images will be on my facebook fan page.

My website is currently in the process of being put together so, I’ll keep you updated when this is set up!

Story from Yahoo News.

Excerpt:

A Nova Scotia court has ruled that a former university student does not have to pay back tens of thousands of dollars he borrowed from a bank.
Alfredo Abdo won his case in bankruptcy court this week, with the court concluding that the Royal Bank of Canada was at least partly responsible for what happened.

“I question whether advancing all that money at one time was prudent banking on the part of RBC,” registrar Richard Cregan said in a written decision.

Abdo was a promising engineering student at Dalhousie University in September 2004. He had good grades, a scholarship and lived at home with this family.

In his second year, at the age of 19, he borrowed $20,000 from RBC though a student line of credit. He made bad investments online, according to court documents, and he accepted an offer from the bank for another loan of $30,000 to solve his problem.

Abdo started having dizzy spells. Finding his engineering program very stressful, he switched to commerce. But he dropped out of university in his third year.

The dizziness and social anxiety never went away, Abdo said, and therefore he couldn’t work or pay back the bank loans. He filed for bankruptcy last November.

The Canadian court probably thinks that they are compassionate, good people sticking it to the corporations. But actually what they’ve done is caused the banks to think a second time about making loans to borderline cases, so that the poorest students will now be refused student loans. If the courts refuse to enforce contracts signed by both parties, then the banks just won’t enter in to those contracts.

Down in New Zealand, they have the same problem.

Excerpt:

Thousands of people with student loans are defaulting on payments, leaving the Government to chase hundreds of millions of dollars.

More than one in five borrowers – or 114,000 people – have overdue payments and thousands of students are leaving tertiary education with no qualification and big bills.

The Education Ministry’s student loan scheme annual report shows that $306 million in payments is overdue, a $100m increase from a year ago.

The substantial growth includes a big rise in the level of payments owed by people now living overseas, more than doubling to $114m.

New Zealand University Students Association co-president Sophia Blair said it was not surprising that students with loans were heading overseas and letting the bills mount. “You can earn higher wages [overseas].”

[...]Total student loan debt had reached $10.2 billion and is predicted to grow by an average of $875m a year to more than $20b by 2022.

The report also showed about 39 per cent of students who left tertiary education with a loan did so without achieving a qualification.

About 8000 students with loans who left study in 2005 had nothing to show for it by 2007.

New Zealand, if I understand correctly is a fairly left-wing country, which probably subsidizes tuition and taxes income. So, students would be incentivized to game the system by taking out loans backed by the government, and then leaving to work abroad in more capitalist economies. Socialism encourages people to game the system and avoid taking responsibility for their own decisions.

UPDATE: New Zealand blogger Madeleine Flanagan wrote to me in an e-mail:

It’s old news, it has been the same way for years and years and that story comes out every year but as always it is interesting.

Your assessment is pretty spot on. In New Zealand student loans are pretty much available to anyone who applies for one. Acceptance at University or an alternative tertiary institution is not difficult, especially once you are over 20 as the institutions want your money – they get more funding the more students they have. Student loans are interest free and you do not have to begin repayments until you finish study. The state funds something like 75% of the tuition fees directly anyway so the loan is only for 25% of the actual cost. There are benefits available for living costs and if you don’t qualify for them you can borrow living costs and have them added to your student loan. So it is set up to make it easy to get into debt.

Being a fairly left-wing country there is a lot of regulation in the market place so of course you can pretty much always earn more overseas and once overseas the state cannot garnish your wages to get your student loan repayment.

The system has some fairly bad holes in it. For example, people who are being funded for Uni by they employer, like I was pre-accident, to study can take the cash for tuition fees from their employer, invest it and then take out an interest free student loan to pay their tuition fees. At the completion of study they then pay off the loan with the invested funds and pocket the interest – compliments of the taxpayer. Only students with cash coming from somewhere can do that as your student loan gets paid straight to the education provider apparently a lot of students with wealthy parents do this too.

As if this situation were not bad enough, organizations like New Zealand University Students Association (NZUSA), quoted below whinging about the level of pay rates in New Zealand , typically also whinge that education is not “free” anymore like it used to be when the politicians went to Uni! They argue that being educated to tertiary level benefits society so therefore society should pay for all of it (and have much higher wages).

New Zealand is crazy.

Madeleine and her husband Matt write at MandM blog.

AccountNow is a Prepaid Visa or Prepaid MasterCard for those who have been denied a bank account. It offers everything like a credit card except you control your spending. There is no limit, it all depends on how much you choose to put on the card. You can even have direct deposit of your payroll or government earnings so you money is safe and secure. You can use your AccountNow card at atms, pay bills online, borrow money and establish a credit history.  You can add money at over 135,000 locations such as, Money Gram, Walmart, CVS, Albertsons, Western Union and Rite Aid just to name a few. AccountNow is like a checking account, keep your money safe and all prepaid cards are FDIC insured. They offer 100% guarantee approval as long as you have identification. So for those of us who have got ourselves in a bind AccountNow never checks your credit history or for those who have no credit at all AccountNow is the best way to go. Save your money, build your credit, feel safe and secure with AccountNow.

Alright, Heather, I thought we’d share a little bit more about ourselves!

Here’s your challenge to fill this out, too!

1. What is your favorite thing to snack on while your blogging?
Peanut Butter MnM’s and iced tea/hot tea

 

2. What is one thing you wouldn’t want to live without?
my microwave. Contrary to what you may see on here, I’m not a little Betty Crocker!

3. Beach, Mountains, or Farm? Where would you live if you had a choice?
Definitely beach. I love the sound of the water, the feel of the sand, the potential wildness of it!

4. What’s your least favorite chore/household duty?
Dishes! I hate to do them & I don’t have a dishwasher. Ugh.

5. Who do people say you remind them of?
Apparently I look like Demi Moore. Not too bad, I guess! :S Other than that, I’m not really sure!

6. Prefer parties and socializing or staying home with the fam?
I’m a big socializer! Which is funny since the DPH is a home-body! Somehow it still works for us!

7. What’s your all time favorite movie?
Sabrina (not the witch). I love the version with Harrison Ford! I could watch it everyday!

8. Do you sleep in your make-up or remove it like a good little girl every night?
I am lazy. That is necessary information for the following statement: I rarely remove my makeup before bed. Guess what- I hardly ever get break outs, too. (Shhh! Don’t say that too loud!)

9. Do you have a hidden talent or a deep desire to learn something that you’ve never had a chance to learn? What is it?
I’ve always wanted to learn how to sword fight. Not that fencing stuff, but like with a broad sword. I’ve even gone so far as to look for a teacher. There aren’t any too close to me.

10. What’s one strange thing you’re really good at?
Playing video games! I love it!

11. What first attracted you to your spouse?
He threw a racketball at me. And he just has such a presence.

12. What is something you love to smell?
My husband. (Yes, that is your one mushy comment for this post. Oh wait, that’s 2.) And I love the smell of mocha. And the perfume called Nokomis. And melted cheese. Wow, I apparently really like to smell things.

13. Tell something about you that you know irritates people.
I am bossy.

14. When you have extra money, what’s the first thing you think to do with it?
Pay off more student loans.

15. Are you a silent laugher or a loud laugher? What makes you laugh the hardest?
I try to be a silent one, but I’m more of a loud laugher. I laugh hardest at my families stories. Especially when my brothers & I begin telling stories about what the others did when we were younger.

16. Where is your favorite place to shop?
I love thrift stores. And Target.

17. What’s one thing you’d do more often if you had more time?
I would walk. I know I need more exercise, but with such a busy life it’s not easy.

18. Are you a big spender or frugal?
I would definitely say frugal! I do have to limit my “bargains”, though…

19. Who is your favorite character of all time?
Egwene Al’Vere from the Wheel of Time series by Robert Jordan/Brandon Sanderson

20. Would you want to be famous?
It would be fun & it could be useful, but it would be hard, too.

(BTW- I totally “borrowed” this list from Baby Bangs!)

Música é força, é paixão. É uma manta que nos aconchega quando faz frio, e uma brisa de ar fresco quando faz calor. Música é alma, é coração. È uma história interminável, que volta vezes sem conta, sem ser preciso a chamar. Música são asas, que nos permitem voar, e que podemos emprestar. By André S. Canilho

Oct 16 2009 – Lenders try new tactics (The Straits Times)

In summary, there has been a surge in home sales and this has prompted 2 lenders to try new marketing approaches to capture the mortgage market. From innovative mortgage products and low interest charges to freebies and better service, it has become ever more competitive.

In my humble opinion, a loan in any form is in fact a deed to sell your life, literally. Paying the interests alone is enough to drain a chunk your monthly salary, of course dependable on the loan size and period. Example,

You’ve taken a home loan of $100,000 for a repayment period of 10 years. For ease of calculation, let’s say the interest rate is flat at 3.5%.

Interest alone: $100,000 x 3.5% x 10 = $35,000
Monthly installment: $135,000 / (10 x 12) = $1,125

Another example, say you’ve taken a car loan at $50,000, flat rated at 2.5% for 10 years.

Interest alone: $50,000 x 2.5% x 10 = $12,500
Monthly installment: $62,500 / (10 x 12) = $520

So how deep you’ve dug this hole depends on 1) how big is the loan, 2) how long is the repayment, 3) the interest rate chosen.

How am I suppose to cough up $100,000 for my dream home? Well, not many of us can cough that up no matter how hard we try. A loan is convenient in that sense, and that convenience comes with a tiny little price tag.

So since a loan is necessary in that aspect. What should you be looking out for to minimize your misery?

• Be sure to check with the banks the interest rates provided, whether it’s fluctuating or flat-rated, whether there’s any hidden charges or not.
• Be sure to consolidate and compare the rates. Go home and work out the actual loan amount and period required best to your comfort level. Will there be any other major financial changes such as change of jobs, having a new baby, getting a car, etc.
• Also find out if there are any penalty bank charges if you’re able and decide to clear the remaining outstanding prematurely. As much as possible, do try to repay the loan as soon as possible.
• Don’t be misled by the frills and freebies. If you’ve done the equation correctly, that freebie that you’ve collected isn’t worth that $12,500 interest alone.

Remember, the object at interest (car or house) isn’t technically yours until you’ve completed the loan repayment. Default the payments and the banks can come knocking and claiming what’s theirs, not yours.

Food for Thought

What could you have done with that interest of $12,500? You could have brought your loved ones on a holiday tour. Or you could have splurged it on yourself with a wardrobe makeover? Could you also have invested it and made it work and grow for you?

You have probably been warned of the dangers of lending money to family and friends.  For the most part, this is sound advice.  According to a Money survey, 43% of readers who lent to family or friends weren’t paid back in full and 27% hadn’t received a dime.  There is obviously risk, but at the same time,  lending money to family and friends at an interest rate lower than the banks’ offers great potential for gains.

Virgin Money’s social loans (by the same Sir Richard Branson who brought you music and planes) ameliorate this risk by providing a structured way to lend or borrow money with family and friends.  The loans can be for anything, such as to start a new business, to buy a car or a home, or to finance an education.  Through its website, a lender and borrower can negotiate the terms of the loan, such as the principal, interest rate, and repayment schedule, and sign a promissory note.  Setting up the loan on Virgin Money means that there is a record of the loan.  On the one hand, the lender will have to pay taxes on the interest, which he is supposed to do anyway.  On the other, should the borrower ever default, the lender can deduct the loss from his tax return.

So whether you want to lend (after determining you have the funds to do so and the borrower has the ability to repay) or borrow some money, consider setting up a social loan.  The terms will probably be better than those from a bank, since you will be able to negotiate them with the other party. Moreover, documentation will protect the interests of both parties.  Sounds like a win-win situation to me.